When KEC International Limited’s (NSEI:KEC) announced its latest earnings (30 September 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were KEC International’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not KEC actually performed well. Below is a quick commentary on how I see KEC has performed. Check out our latest analysis for KEC International
How KEC fared against its long-term earnings performance and its industry
I like to use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This technique allows me to analyze many different companies in a uniform manner using the latest information. “For KEC International, its “, most recent earnings is ₹3,611.7M, which, against the prior year’s level, has risen by 48.98%. Since these figures are relatively myopic, I have computed an annualized five-year figure for KEC’s net income, which stands at ₹1,747.4M. This shows that, on average, KEC International has been able to steadily raise its earnings over the last couple of years as well.
How has it been able to do this? Well, let’s take a look at whether it is only because of industry tailwinds, or if KEC International has seen some company-specific growth. Over the past few years, KEC International increased its bottom line faster than revenue by successfully controlling its costs. This brought about a margin expansion and profitability over time. Scanning growth from a sector-level, the IN construction and engineering industry has been growing its average earnings by double-digit 13.18% in the prior year, and a more muted 2.95% over the previous few years. This shows that whatever tailwind the industry is deriving benefit from, KEC International is capable of amplifying this to its advantage.
What does this mean?
KEC International’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research KEC International to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for KEC’s future growth? Take a look at our free research report of analyst consensus for KEC’s outlook.